Saturday, 18 October 2008

Article for 'The Marketer' (draft: comments?)

LEANER AND GREENER

Last time I wrote about ‘the year of the small car’. The latest figures from the USA show that it is still true that the small car is the only part of that market to grow this year. But the small car boom happened earlier in the year in response to the oil price. Whereas now the car market is challenged by a greater terror; that of another ‘great depression’. People simply don’t want to make a major purchase. And in a double bind, financing companies don’t want to extend them credit either. That’s good news in itself for carbon emissions. The falling oil price reflects falling fuel use worldwide which means falling emissions. But there is nothing that sustainable about bankruptcy, stressed communities, hardship.

We have been exposed to news reporting about ‘the financial tsunami’ which indeed resembles the reporting of natural disasters. People are (rightly) scared about holding onto their house, their job, the rising cost of living, their pension, the potential for their savings bank to collapse or even a wealth destroying, run on the currency.

The first thing to realise about such times is that it is now well beyond ‘rational economies’ (like buying a smaller car). What’s happening is better understood as ‘sacrifice’ – a propitiatory offering to the angry gods of financial meltdown. It’s almost as if people need to make these sacrifices to ward off any personal disaster. What gets sacrificed is things with high symbolic value - ie brands. Starbucks has already announced the closure of 600 outlets in the USA and slowed its global expansion. Why? Coffee is a boom time drink – it is the 1980s expresso, the dotcom boom frapuccino. It would almost be tempting fate to drink it now. Expecting by the same token plummeting sales of most luxuries; designer brands, champagnes. This is a big headache for eco luxuries – the ‘green is the new black’ brands.

So what is to be done? The first thing to note is that sacrifice (as opposed to broader economies across all purchasing) is highly selective. At this stage the main thing is not to be a candidate. You spend less on your mobile phone than on designer coffee. It’s actually really good value. A green example would be boxed vegetable deliveries - a sector that’s already been hit hard this year. Yet it’s not a luxury item in that it’s much cheaper than supermarket organic vegetables. The thing to focus on is a shift in mood. From Islington dinner party (“pass the kale please”) to warming healthy winter soups.

Clever pricing strategies are obviously going to have particular relevance now. Meet the same needs at dramatically different price points. Some of these moves are very green too. Why own when you can rent? Why buy packaging, when you can refill? Any way to save is good and finally we could see a mass swing to ‘saving the planet while saving money’ schemes; home delivery (vs driving to stores), sharing lifts, lagging lofts, avoiding food waste, eating less meat, Amazon ‘new and used’.

In terms of mood, as well as sacrifice, there is also a big swing back to community. We are ‘all in the same boat’ (the ark, perhaps?) BP’s ‘win a year’s supply of fuel’ is in this view the wrong message – jarring, selfish ‘I’m alright Jack’. Much better are the utility company social tariffs, or innocent’s lovely customer-knitted woolly hats promotion, all proceeds going to keeping old folk warm this winter. Another mood theme is nostalgia, we want to return to safer times. If you do have a heritage brand, or sell English camping holidays, or carpet sweepers, your time has come (again).

Finally this is a time of judgement for Corporate Responsibility. It was easy to make commitments in the good times. Now we will see which companies meant it. And those that did will stand out as different, authentic, brands we really can trust.

"Finally this is a time of judgement for Corporate Responsibility. It was easy to make commitments in the good times. Now we will see which companies meant it."

You hit the nail on the head. It was easy in good times for companies to commit to "Green Marketing", but when times get rough mainly initiatives will fall by the wayside. The companies that stay the course, deliver value and connect with their customers will come out the other side of this economic slowdown as the big winners.

About Me

John Grant is author of Co-opportunity (Jan10) and the award winning 'Green Marketing Manifesto' (Oct07), and three previous books. John was a co-founder of St Luke's the socially aware ad agency and is the co-founder of Ecoinomy which applies community self organising principles and social web platforms to greening the office through behaviour change. Contact me at john.grant(AT)ecoinomy.com